Opt-in requirements for direct mail will hurt the U.S. Postal Service as marketers will look for other means to promote their goods and services, a Direct Marketing Association study predicts. These restrictions will also increase costs.
While the overall volume of postal mail will go up by as much as 20% over the next three years, the DMA predicts that commercial mail volume will fall dramatically 37 to 60 months after the passage of harsh privacy legislation by Congress.
The reason is that direct marketers will move their prospecting efforts to “more efficient” methods such as local newspaper advertising and cable television channels which won’t have such restrictions imposed on them, the DMA said.
The study also projected that opt-in requirements would raise mailers’ total costs by 3.5% to 11% , depending on the size of their firms. With opt-in restrictions, catalogers would have to increase mailings to their house lists by 27% and their prospect mailings by nearly 70% in order to keep current annual revenue and profit levels.
Opt-in requirements, the study argued, could in turn drive smaller catalogers out of the market and deter new companies from coming in. The study also found that the temporary rise in direct mail that these restrictions will engender will give way to a smaller volume of mail as companies being migrating to other media.
All this would follow a more than 10-year growth in direct mail volume and response rates which has been greatly aided by advances in database marketing technology which have cut costs significantly, helping improve company return-on-investment rates.
On top of this, the USPS will also have to avoid large rate increases and reductions in delivery speeds.
“We are concerned because the USPS is in a dog fight just to remain competitive and relevant, as it is,” said H. Robert Wientzen, CEO of the DMA, in a statement. “The last thing the Postal Service needs is another legislative nail in its coffin that will drive away its biggest customers.”
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